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Starting A Business After Retirement

For a lot of people retirement is but a transition that frees them to live their dream of running their own business. Census figures show that about 20% of those in their 50s were self-employed. But, twice that, a whopping 40% of those working past age 70 are in business for themselves.

If you're a seasoned professional starting your own business odds are that you already know the business, you have the skills and experience, you know or have the certifications you'll need, and you may even have a good idea of where your first clients will come from. The following 4 steps can help you start on the right track:

1. Prepare a personal inventory

You want to be sure you have the basic skills any independent contractor needs, no matter what the business. For example: you will need to

* organize an office,
* handle records and finance,
* manage your own time, and
* promote your services

Don't be reluctant to hire experts to help with some of these tasks, and when appropriate barter your expertise for theirs.

2. Organize your Business

Once you are ready to get started, you'll need to decide how to structure your business. Will you run things simply as sole proprietorship, a partnership, or a corporation? Consult with a business attorney or your accountant to help guide you in selecting a structure that fits your circumstances.

Generally, if you operate as a sole proprietor and have no employees, you can use your social security number as your Tax ID. Corporations and firms with employees need an Employer Identification Number (EIN) from the IRS.

3. Organize Yourself

You will need to set up an office. This means you'll need all the things that you ordinarily would expect from an employer:

* a useable workspace;
* computer, e-mail and other equipment;
* files for correspondence, expenditures, billing, et cetera;
* a phone with voicemail;
* business cards, stationery, and probably a Web site

You will also have to organize your life and probably impose discipline on yourself, to make sure deadlines are met. If you work from home set aside time and space for yourself, when and where family members should not intrude.

4. Have Access to Working Capital

Starting a business can be thought as running a marathon. Perseverance and staying power are probably the most important resources to being successful. One key element to stay in the game is having access to enough working capital to weather the downturns. One potential source of cash that's not often obvious is the possibility to borrow from your retirement funds thru a self-employed 401(k) loan. While tapping your retirement funds may not necessarily be the best or wisest source of financing, it is one option that you should be aware of and one that has advantages over some other forms of financing commonly used by self-employed individuals. You may find more information on the self employed 401(k) loan on www.InvestSafe.com. Whether or not you use its loan feature, with a Self-employed 401(k) you can continue to build tax-advantaged retirement savings.

Increasingly, employers are treating workers as in-house consultants for renewable short term assignments. Instead of fighting this trend, you can strategically develop your consulting skills so that more than one client will want to pay for your time. Then you too can join the rank of those who bask in the financial and emotional rewards of being an independent consultant.

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Daniel Lamaute, a retirement investment specialist with Lamaute Capital InvestSafe.com

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